Patent Decisions

The Federal Court of Appeal has dismissed Nova's appeal of
an earlier finding that it had infringed Dow's patent relating
to polyethylene used to make film products (2014 FC 844).

The Court of Appeal characterized the appeal as concerning
disagreements with the Judge's factual findings and assessment
of the expert evidence. The Court of Appeal found the Judge did not
err in law.

Nova had alleged the Judge erred in not finding: a promise of
synergistic utility; that the invention was obvious; and that the
claims were broader than the invention claimed or disclosed.
Further errors relating to construction and infringement were also
alleged.

The Court of Appeal described the standard of review on
construction to be a matter of law, but since construction of a
patent is heavily dependent on the evidence given by persons
skilled in the art, that evidence will bear heavily on the
judge's findings. Thus, the Court of Appeal found that
"trial judges are nevertheless entitled to some leeway as they
are often in a much better position than appellate judges to
understand the intricacies of the art underlying the invention
disclosed in a patent."

The Court of Appeal also found the Judge's approach to the
promise of the patent to be broadly consistent with the most recent
jurisprudence. That approach held that first, one must look for the
elevated promise or claimed utility in the claims of the patent.
Second, consider any statement found elsewhere in the disclosure,
which should be taken as "mere statement of advantage"
unless the inventor "clearly and unequivocally" states
that it is part of the promised utility of the invention.

On this basis, the Judge did not find an explicit promise of a
specific result. There was no finding of a statement of utility in
the claims, and only one reference elsewhere to support an argument
of enhanced utility. The Court of Appeal was also wary of using a
stray phrase on page 1 of the patent to define the promise of the
patent.

Ultimately, the Court of Appeal agreed that the Judge could find
that the inventors did not make an explicit promise of a specific
result, and that the patent did meet the test of a "mere
scintilla" of utility.

The remaining points of appeal were dismissed, with the Court of
Appeal holding that the findings of fact were open to the Judge to
make, and there was no palpable and overriding error sufficient to
overturn the decision.

This was a patent infringement action against Apotex and Cobalt,
relating to a combination of drospirenone and ethinylestradiol for
an effective oral contraceptive. The Court found that the asserted
claims were not invalid and that Apotex's and Cobalt's
products were formulated in a manner that fell within the scope of
the claims and, therefore, infringed the claims of the '426
Patent.

On the issue of stare decisis and comity, the Court considered
the Court of Appeal's prior construction in the NOC context to
be prima facie binding, and would adhere to it unless a party
provided good reasons not to. The Court also noted that it would do
the same when defining the "inventive concept" of the
patent and determining the "promise" of the patent, both
of which are aspects of claim construction, and are therefore
questions of law.

On the other hand, the Court noted that previous findings of
fact and mixed fact and law in the NOC cases were potentially
persuasive, but they must be approached with caution. These
findings, including the definition of the person of skill in the
art, and the issues of obviousness, ambiguity, overbreadth, utility
and sufficiency must be determined again based upon evidence
adduced in this proceeding. Informed by these findings in the NOC
proceedings, the Court ultimately concluded in its analysis that
the asserted claims were not invalid, notwithstanding new evidence
adduced at trial.

With respect to infringement, Apotex's defence was that its
tablets contain drospirenone in the form of a "molecular
dispersion", which means that drospirenone is sufficiently
dissolved in a medium so as to no longer be in the form of
particles. Since the patent refers only to "particles",
Apotex tablets would therefore fall outside of the patent if this
characterization was correct . The Court found Bayer's expert
witnesses to be generally credible and its experimental tests were
not refuted by the results of Apotex's tests. Bayer also
pointed to the absence of documents relating to the development of
Apotex's tablets that one would expect to find, as detracting
from the overall credibility of Apotex's defence. The Court
agreed that the absence of any documentary evidence to suggest that
Apotex's suppliers intended to manufacture a molecularly
dispersed form was one factor to consider when assessing
credibility. Further, the available evidence regarding the
development of the tablets, namely that the ANDS did not refer to
molecular dispersions and that the tablets were produced in
reference to the formulation of Bayer's tablets, reinforced the
Court's conclusion that Apotex's tablets are formulated in
the same manner as Bayer's tablets, and are therefore
infringing.

The Court then went on to consider whether the Cobalt tablets
infringed the '426 patent. Cobalt had previously tried and
failed to amend its pleading to delete a paragraph and replace it
with a statement that its product did not contain drospirenone.
Cobalt had appealed the decision denying its request and brought a
further motion to amend its pleading, but subsequently abandoned
both the appeal and motion. The Court noted that it may make a
finding of fact that differs from what was admitted by the
defendant if the admission concerns a factual issue that ought to
be tried in the interests of justice. However, in this case,
Cobalt's decision to not pursue the appeal led the Court to
conclude that the admission that its product contains at least some
drospirenone particles must be taken as final. Although Cobalt
could not present evidence that contradicted its admission, Cobalt
was not precluded from presenting its defence to Bayer's
allegation of infringement. Ultimately, Bayer's experiments and
expert evidence demonstrated that Cobalt's tablets infringed
the patent.

Bayer's entitlement to an accounting of profits and
Bayer's election between Bayer's damages and Apotex's
and Cobalt's profits will be addressed in the quantification
phase.

Pfizer moved for an order reconsidering and varying the judgment
of the Court of Appeal's decision in 2016 FCA 161, summarized the
week of June 13, 2016. In that decision, Pfizer had
successfully appealed from the Federal Court finding that Pfizer
was liable for damages under section 8 (reasons in 2014 FC 248 and subsequent reasons in 2014 FC 634, summarized the
week of April 7, 2014 and the
week of August 11, 2014, respectively). The Court of Appeal set
aside the Federal Court's damage award against Pfizer, and
remitted the matter to the Federal Court for reconsideration.

In the current motion, Pfizer stated that it paid the damages to
Teva following the Federal Court's damage award. Following the
Court of Appeal's judgment setting aside the damages award,
Teva refused to return Pfizer's payment. Therefore, Pfizer
asked that the Court vary its judgment to add a requirement that
Teva return the payment with interest.

The Court of Appeal noted that it could not entertain this
motion unless it has subject-matter jurisdiction over it, namely
whether the current two judge panel could vary the judgment issued
by the three judge panel where one of the three Justices on the
appeal that issued the judgment has retired.

The Court found that Rule 399(2)(a), which allows the Court to
vary a judgment where something unforeseen that could not have been
dealt with as part of the appeal hearing but related to it has
later happened, did not apply in these circumstances. In this case,
Pfizer could have specifically requested, in its notice of appeal,
that if judgment were given in its favour, Teva should return the
payment with interest. However, there was no such request in
Pfizer's notice of appeal.

This also barred relief under Rule 397(1)(b), which deals only
with "a matter that should have been dealt with" that
"has been overlooked or accidentally omitted" in the
Court's judgment.

The Court dismissed the motion but not before providing two
alternatives. First, Pfizer could now sue Teva for restitutionary
recovery of monies wrongly withheld from it and any other relief
warranted by Teva's act. Lastly, since this matter was remitted
to the Federal Court for redetermination, Pfizer could provide
submissions as to what interest Teva should pay during the period
that it wrongly held Pfizer's payment. However, if Teva was
entitled to its damages award all along, the Federal Court may find
that Teva's retention of Pfizer's damages payment is of no
remedial consequence whatsoever.

The Federal Court of Appeal dismissed an appeal from a decision
prohibiting the Minister of Health from issuing a Notice of
Compliance to Teva for EXJADE®. The Federal Court had concluded
that Teva's allegations of inutility, obviousness and
insufficiency were not justified (the underlying application
decision is 2015 FC 770 and summarized the
week of July 6, 2016).

On appeal, the Court of Appeal characterized the sole issue as
whether the trial judge had erred in law in its construction of the
promise of the relevant patent. Teva acknowledged that the trial
judge had correctly identified the principles of law relevant to
the utility requirement but erred in the construction of the
promise of the patent by:

relying on the patent's abstract to construe the
promise;

distinguishing between the promise made in respect of the
patented formula I and formula II compounds; and,

applying the doctrine of claim differentiation.

While the Court of Appeal agreed that the trial judge ought not
to have considered the abstract when construing the promise of the
patent, this error was not material to the decision and the trial
judge's construction was found to be correct.

The FCA concluded that the trial judge's construction of the
promise of the patent was consistent with differentiation contained
in the disclosure and the claims. Thus, the trial judge was correct
to differentiate between the compounds and use claims. The Court of
Appeal noted that Teva's argument that the trial judge erred in
distinguishing between the promise made regarding the two classes
of compounds ignored the fact that at law different claims can have
different utilities for the same compound.

The Court of Appeal also reiterated that where an allegation of
an unfulfilled promise is made, "the patent will be construed
in favour of the patentee where it can reasonably be read by the
skilled person as excluding this promise" (see Apotex Inc. v. Pfizer Canada Inc., 2014 FCA
250 at para 66). The Court of Appeal agreed with the trial
judge that this patent could be read by a person skilled in the art
as excluding Teva's asserted elevated promise of utility.

In this copyright infringement claim, the Applicants alleged
that they own or control the copyright to 21 musical works and that
the respondents published those works without permission. Further,
the Applicants asserted that there had been improperly passing off
their wares.

The Court initially dispensed with all three of the Respondents
procedural objections, finding that the Court could accept physical
evidence in this application, that the Applicants had standing to
bring the application for all of the works and that the Federal
Court had jurisdiction to hear the copyright infringement
claim.

With respect to the substantive merits of the application, the
Court agreed that the Respondents had infringed the Applicants'
copyright, but did not find that there had been any passing
off.

The facts, briefly, were that the Respondent Conservatory Canada
published a series of musical books using the publisher Waterloo.
The last two editions of the series, including the 2014 Edition,
were published by different publishers. While the Applicants agree
that, pursuant to the 1999 Agreement, they gave their consent to
publish the works in question in a series, they argue that
permission was granted to Waterloo, and that the Respondents lacked
the necessary permission to publish the 2014 Edition.

As the parties were unable to locate a copy of the Agreement,
the Court was left to reconstruct, on the best available evidence,
the arrangements that took place between the parties. The Court
ultimately found that the Applicants' interpretation of the
Agreement, including that permission was granted to a publisher
Waterloo and not the Respondents, was more persuasive.

The Court further found that there was no limitation period
issue with respect to the copyright infringement. Whether the 2014
Edition is considered to be part of one continuous publication of
the series and hence one ongoing breach, or a separate publication,
the application was made within the limitation period.

The Court dismissed the Respondents' allegation that the
Applicants engaged in copyright misuse or abuse of process. The
theory of copyright misuse is not well-developed in Canada.
However, the Court noted that, even if it were, the facts simply do
not support any malfeasance or wrongdoing on the Applicants'
part. The Court also dismissed the Respondents' claim that the
Applicants' gave any implied consent to publish the works in
the 2014 Edition, finding that the Respondents showed evidence of
implied consent.

On the issue of damages, the Court agreed that that the
infringement was commercial in nature, as the books were being sold
commercially notwithstanding Conservatory Canada's status as a
not-for-profit entity. The Court awarded per work damages at the
lowest end of the commercial range for a number of reasons, inter
alia, the infringement at issue appeared to be the product of poor
record-keeping and rights management on the part of both
parties.

Finally, the Court rejected the Respondents request that they be
awarded costs on a solicitor-and-client basis. While the Court was
sympathetic to the Respondents' position, and aware of the bad
blood between the parties, the Court did not find any reason to
take the unusual step of ordering costs against the winning
party.

Trademarks Decisions

This was an appeal of the decision of the Trademarks Opposition
Board (TMOB), refusing the Applicant's opposition to a
trademark application filed for the Respondent's
"Marché & Wave" Design. On appeal, the
Applicant only took issue with the TMOB's rejection of the
"not distinctive" ground of opposition under section 2 of
the Trade-marks Act.

The Court stated that the standard of review was reasonableness,
notwithstanding the additional affidavits submitted by the
Applicant. The new evidence was found to be merely repetitive or
supplementary, and would not have materially affected the
TMOB's findings of fact or the exercise of its discretion with
respect to the "not distinctiveness" ground of
opposition.

The Court then pointed out that the TMOB's decision focussed
primarily on whether the Applicant had met its initial evidentiary
burden to support the "not distinctive" ground of
opposition, and not whether the Respondent had established that the
Mark was distinctive within the meaning of the Trade-marks Act. On
this basis, the Court concluded that the TMOB's finding that
the Respondent had failed to show that the term "market"
or "marché" lacked distinctiveness was
reasonable.

While the TMOB found that there were numerous businesses that
use the word "market" or "marché" in
their name and that the term was the dominant portion of the Mark,
the majority of these businesses were not restaurants. Therefore,
the Court found that it was reasonable for the Board to conclude
that the Applicant's evidence was not sufficient to show that
the Mark lacked distinctiveness such that it was incapable of
functioning as a source identifier for the Respondent's
services.

Many entrepreneurs and small business owners exhibit an extraordinarily high level of motivation. They are individuals with the wide-ranging skill set that is necessary to achieve success in their chosen field.

The Federal Court of Appeal has recently confirmed the decision of the trial judge and dismissed an appeal from a decision which found that use of the business name "Time Development Group" infringed...

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